A provocative, unsponsored assessment of current and future legal, regulatory, marketplace, and cultural issues affecting telecommunications and information policy presented by Rob Frieden, Pioneers Chair and Professor of Telecommunications and Law, Penn State University

Sunday, January 1, 2012

During the holiday lag, what better time for Verizon Wireless to sneak in a multi-million dollar revenue enhancement, called a convenience fee for the privilege of using a credit card to pay a bill.If the airlines, cable television operators and wireless carriers previously could insert special bill line items, then why not use holiday distraction to inject another revenue “enhancement”?

I’m sure some well-paid, self-congratulating MBA calculated millions for something that did not suddenly cost Verizon more.Haven’t consumers become inured to bogus ala carte line items?I must be one of the few who won’t do business—if I can afford to do so—with a venture that pads it bills with fees for what used to be called overhead.Several national car repair companies impose a 10% “shop fee” on top of everything else.Who’s going to notice another line item in a cellphone bill that already contains one half dozen?

Think again.

With a little extra time on our hands, social networkers can generate the kind of publicity Verizon thought would not occur, what with better things to do during the holiday season.These very same executives also thought no one would notice a $52 million overcharge for inadvertent data sessions caused by an ill-placed handset button.Recall that Verizon managed to forestall any consequence for over fours years!

I’ll leave to others commentary on the power of social networking.I’ll just list this event as one more indication that you can add wireless to phone company, but you still have a phone company.Verizon management must have thought that they could get cover when all the other carriers would quickly follow Verizon’s lead and add the $2 convenience fee.Who knows which carrier doubled the ten cent per text fee?No penalty when ever carrier adds insult to injury?The other wireless carriers must have read the angry tweets before following Verizon’s lead.

About Me

Rob Frieden serves as Pioneers Chair and Professor of Telecommunications and Law at Penn State University.He also provides legal, management and market forecasting consultancy services and has written four books, most recently Winning the Silicon Sweepstakes: Can the United States Compete in Global Telecommunications published by Yale University Press. Rob has written over one hundred articles in law reviews and telecommunications policy journals and has provided commentary in a variety of trade periodicals. He updates a major communications treatise: All About Cable and Broadband (Law Journal Press).

Rob has held senior policy making positions in international telecommunications at the United States Federal Communications Commission and the National Telecommunications and Information Administration.In the private sector, he practiced law in Washington, D.C., and served as Assistant General Counsel at PTAT System, Inc. where he handled corporate, transactional and regulatory issues for the nation's first private undersea fiber optic cable company. Professor Frieden holds a B.A., with distinction, from the University of Pennsylvania (1977) and a J.D. from the University of Virginia (1980).